Volkswagen’s plans over the next several years are to produce all-electric cars with their new electric-car platform– 50 million of them in fact! Herbert Diess, VW’s chief executive, shared with Autoblog, that VW’s goal shouldn’t be too difficult for the German company to accomplish having sold 10.7 million vehicles last year.
Not only is ground-breaking taking place on an electric-car factory in China, but VW has also obtained a battery source for their 50 million electric cars. “I think we have the best setup strategy for the electric vehicles to come,” Diess told Automotive News on Nov. 12.
Tesla in the meantime is creaming all competitors in the electric car category as well as in the luxury car niche. For instance in the US during this year’s third quarter, their Model 3 was the best-selling electric car and overall the fifth best-selling sedan, capturing three of the top four spots among best-selling electric cars with their Model S and Model X.
And according to Atherton Research, Tesla outsold Mercedes-Benz for the first time in the US biting into the sales of conventional autos. This small company is accelerating its competition with VW, Toyota, GM, Ford, and others, forcing these major automakers to abandon their wait-and-see strategy on electric cars.
In retaliation, mass-production muscle is being displayed by automakers with unforgiving lower price ranges. If Tesla’s production processes aren’t hyper-efficient, it will still have room to efficiently deal with the profit margins on premium sedans and SUVs priced at $100,00. However, the company has promised a $35,000 base price for its mid-range sedan, Model 3, which will give them far less profit margin maneuverability. Currently, the Model 3’s base price is at $45,000.
Understanding all of this, VW intends to offer its entry-level EV for less than $23,000 hoping to put a damper on Tesla’s sales! To do this, VW’s strategy is to speed up its EV production timeline (to be voted on this week) while setting its sights on the Czech Republic, where labor is cheaper, and move some of their labor-intensive assembly of internal combustion engines there from Germany.
If those plans are implemented by VW –in order to produce its 50 million electric vehicles over the next few years— it will be a huge philosophical shift for them, moving the company away from internal combustion engines, used in the first commercial versions invented in Germany.
Be on the lookout in early 2020 for the debut of VW’s first model of its “ID” electric series.